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MDS6212 Fintech Theory and Practice: Week 7 Assignment

220041006 Yihang Li

Questions 1:

In this question, you are expected to conduct some simple analysis on the price dynamics of Bitcoin and Ethereum. Coinmarketcap (https://coinmarketcap.com/) is a famous crypto-currency platform, which keeps track on price data on almost all listed crypto-currencies.

a. Please collect the historical price data for Bitcoin and Ethereum from Coinmarketcap and plot the price time-series for both coins. [You may manually download the data from the website or directly call their official APIs, the documentation for which can be found at https://coinmarketcap.com/api/documentation/v1/]

!pip install python-coinmarketcap from coinmarketcapapi import CoinMarketCapAPI, CoinMarketCapAPIError cmc = CoinMarketCapAPI('c17c567c-c73f-48c0-a103-88ee247d4346') r = cmc.cryptocurrency_info(symbol='BTC')

I recently found myself wanting to download historical cryto data in order to do some data analysis. Although they >do a have a public API this does not seem to have a facility for downloading any historical data. There is also a >notice that this API will be taken offline in Dec 2018 and replaced by a Professional API. The Professional API >will allow for historical data to be downloaded but at the very steep price of $699/month for access to 12 months of historical data and you need to “inquire for pricing” for access to up to 5 years of historical data.

Try to Parse the data from CMC

Combine all above, to form a function

Get the historical data of Bitcoin

Get the historical data of Ethereum

plot the price time-series for both coins

Reference

b. Calculate the correlation between Bitcoin price series and Ethereum price series. Summarize your findings.

Cross-correlation is the comparison of two different time series to detect if there is a correlation between metrics with the same maximum and minimum values. For example: “Are two audio signals in phase?

Auto-correlation is the comparison of a time series with itself at a different time. It aims, for example, to detect repeating patterns or seasonality. For example: “Is there weekly seasonality on a server website?” “Does the current week’s data highly correlate with that of the previous week?”

Here we calculate the Cross-correlation

Very High correlation, highly related

c. Fit two price series with classical ARMA models. Report your regression results.

For Bitcoin

Stationary Test

From the result, it is not stationary

1 order diff -> stationarize

Set p = 1, q = 1 is enough

For Ethereum

Stationary Test
1 order diff -> stationarize

Questions 2:

Now let’s evaluate the quality of ICO white papers, which plays a crucial role in the financing process. Two pieces of ICO white papers are provided here, with one from a success (Filecoin) and the other from a failure (Arqute). You are expected to analyse both documents.

a. Please carefully read through two white papers and summarize the main differences in between.

Filecoin wants to use the power of the blockchain to build a decentralized file storage service using free space on computer hard drives around the world.

The Filecoin whitepaper demonstrates the technical proficiency of the founders. There’s a thorough explanation of the different incentive mechanisms that will keep the interaction between people storing data and storage providers running smoothly. The white paper shows us the team is actively thinking about ways the storage ecosystem could be gamed and is working on provable solutions to these issues.

ARQUTE Global Animation Studio The companionship which produces children animation content in the form of intellectual property, guaranteed by mass publication based on the blockchain. The decentralized Autonomous Organization is a new kind of organizational and legal form that can exist online and is based on blockchain technology. This technology regulates the lawful relationship of the producer and the authors of the animation product. The scheme is based on the science forbidden in physics about the luminiferous ether the all-penetrating average, vibrations that manifest themselves in the form of electromagnetic waves. Under different circumstances, heroes under the influence of ether receive supernormal powers, through which they strive with internal and outer enemies.

b. Please apply textual analysis techniques (recall what we have learnt in Week 4) to derive two quantitative variables that can differentiate these two papers in view of readability and informativeness. [Note that two papers are given in the format of pdf. You may want to convert them into plaint texts with OCR in the first place.]

Convert pdf into plaint texts by using pdftotext

!pip install pdftotext

Reference

Word Cloud

Word Cloud for Filecoin
Word Cloud for Arqute

derive two quantitative variables that can differentiate these two papers in view of readability and informativeness.

fog index: the quality of being easy or enjoyable to read